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Commission ups ante on share scams

Sunday 12th June 2005

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The Securities Commission has began a campaign to alert New Zealanders to share scams promoted by people who telephone from overseas.

A new website (www.sharescams.org.nz) explains how these international fraudsters con New Zealanders into buying or selling shares in little known overseas companies. If shares are bought they turn out to be worthless and people lose their money.

Advertising encourages people to "slam the phone" on these unsolicited callers and alerts them to the new website.

"These fraudsters keep changing their names and the countries they operate from," the commission's director of enforcement, Norman Miller says. "This helps them avoid detection while they keep the money rolling in."

They also change tactics. Recently many people who have already lost money on worthless shares are contacted again - this time by an apparently new "broker" who has a buyer for the shares. Of course, more money must be sent first, and this too is lost.

"We estimate at least $30 million has been lost by people who have told us their experiences," Miller says. "We know that this must be the tip of the iceberg."

Small business people are particularly at risk as the fraudsters deliberately target them with their clever and persuasive patter.

"Hang up on these callers is the best advice. Talking to them gives them more opportunity to persuade you to send money," Millar says.

"It is extremely unwise to send money overseas to someone you know only by a telephone call. Money sent out of the country to these fraudsters will inevitably be lost," Miller says.

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